BUDGET 2015: Hockey goes gentle, vows surplus for 2019

Daniel BurdonDaniel Burdon is APN Australian Regional Media's Canberra bureau reporter, covering federal parliament and politics. He was previously a rural and general news reporter at the Morning Bulletin in Rockhampton and worked in Alice Springs for the Centralian Advocate.

Owen Jacques is an award-winning investigative journalist from Mackay, now based on the Sunshine Coast as APN Australian Regional Media’s Online News Editor. He has a strong background reporting on politics, business and breaking news. Owen has also specialised in resources reporting, which included a successful campaign to fight 100% fly-in, fly-out mining in rural Queensland towns.

THE Abbott Government has taken a softly, softly approach in its second budget, with the target to reach a surplus by 2019 remaining, despite much changing politically and economically in the past year.

Treasurer Joe Hockey told reporters on Tuesday night his second budget, a shared government effort to reverse its political fortunes and the nation's economic future, was "not the end of the process, it's a step along the way".

"We are redirecting funding to areas, such as small business, child care and infrastructure, which will boost growth and create jobs," Mr Hockey said.

But much of the budget, while reshaping small business and child care support, did little to address the structural problems which have dogged Commonwealth coffers for almost a decade.

Government revenues have deteriorated even further, with a $90 billion drop in tax receipts since the Abbott Government took office, driven chiefly by a failing iron ore price that budget papers show was the "largest single contributor" to government revenue write-downs.

But receipts were also down across revenue sources, with falls in fuel excise linked to the mining slowdown and tobacco excise from lower consumption.

Forecasts for company tax also were down $960 million in 2014-15.

While the government's income tax take was up about 8.1% in 2014-15 and further rises were expected, significantly "more subdued wage growth" than expected last year drove down the gross income tax withholding receipts a hefty $8.6 billion.

Reliant on forecasts possibly more generous than the Reserve Bank's outlook, Mr Hockey said it was a "glass half full" budget, and he had not interfered with Treasury's forecasts.

The plan, he said, was to reduce a $48 billion deficit to $40 billion in 2015-16, then down to $35 billion in 2016-17 and to $7 billion in 2018-19, with tenuous forecasts of an unknown surplus for 2019-20.

Treasury noted constrained but solid household consumption and a pick-up in housing construction and services exports.

Mr Hockey said despiteChina's move away from demanding Australia's resources, the coming demand for Australia's services gave him reason to be bullish.

A host of small spending measures across many portfolios were all "more than offset" by cuts in other areas Senator Cormann said.

Senator Cormann said the biggest proposals in this budget, many released before budget day, will face a hostile and more experienced Senate.

While Prime Minister Tony Abbott has given signals of a willingness to negotiate, another year of political tests await.

The Northern Australia plan could mean support for port and mine development.Contributed

NORTHERN AUSTRALIA

THE Federal Government is vowing to push ahead with its Northern Australia plan to encourage development in the nation's top half.

Aside from its guiding white paper being released this year, it will establish a Northern Australia fund worth $5 billion to encourage investment in port, water and electricity infrastructure.

The government's goal is to develop the minerals, energy, "strategic assets", tourism and defence.

This will also include a plan to build the much-needed infrastructure to support it.

The strategy could mean significant support for port and mine development in northern Queensland.

SMALL BUSINESS

SMALL businesses will share in a $5.5 billion package to drive new start-ups and job creation.

In 2013-14, Australians started more than 280,000 new small businesses - a figure the government wants to increase.

New businesses will now be able to immediately deduct professional expenses incurred during their inception - like legal fees - instead of having it apportioned over five years.

Small businesses will also be able to receive deductions on work assets costing less than $20,000 in the same year they make the claim.

The depreciation threshold for immediate deductions currently sits at $1000.

A 5% tax discount for unincorporated small businesses will be available from July, to bring them in line with incorporated small businesses, which will receive a 1.5% tax cut to 28.5%.

The Treasury Department says 780,000 small businesses will be eligible for the tax cuts.

Aerial shot of drought stricken Ilfracombe.Facebook

DROUGHT

DROUGHT-stricken farmers will be able to write off water assets, fodder storage and fencing as part of a budget proposal worth $70 million.

It follows the weekend announcement of a $333 million Commonwealth support package, with $250 million of that coming in the form of concessional loans.

This new $70 million scheme is to come in from July 1 next year.

EMISSIONS

IN ONE of the biggest non-surprises of the Federal Budget, there will be no top-up for the emissions reduction fund over the next four years.

The $2.5 billion fund is the lynchpin of the Abbott Government's climate change policy, but there are fears its funding well will run dry before next year's election.

But Environment Minister Greg Hunt gave his cash-strapped leadership an early exit plan - telling reporters last week he was not "asking for another dollar".

No more "Zone Tax Offest" for FIFO workers.Lee Constable

FIFO

OUT-of-town workers will be forced to pay more tax as the Federal Government cracks down on fly-in, fly-out staff who take advantage of discounts designed for locals.

By taking away the "Zone Tax Offset" for FIFO workers, the government expects to recoup $325 million over four years, although workers in Queensland receive less than $60 a year through the rebate.

The Federal Government estimates that one-in-five who claim the Zone Tax Offset are unfairly taking advantage of the scheme by living in other centres.

To qualify for the tax break, they must work or live in one of these specific remote areas for more than 183 days a year.

For those FIFO workers who live in an area within the tax break area but must fly elsewhere to work, they will be able to keep the tax break.

GREEN ARMY

GREEN army teams which lead the country's land care movement will receive $179 million to boost their ranks by 1500 teams by 2018.

Another $100 million has been committed to the Reef Trust - the fund for investment in environmental projects on the Great Barrier Reef.

The government will also provide $9.4 million to maintain Australia's presence in Antarctica, bringing the total investment in the scientific research program to $118 over the coming financial year.

HEALTH

HEALTH workers must work at least one year in rural or regional areas when nine health workforce scholarships merge.

Obligations under the scholarships ensure exposure to practices in rural settings, and to the lifestyle and work options available to encourage healthcare professionals to continue to work in rural areas.

Combining the scholarship programs will save $72.5 million over four years which will be reinvested in the Medical Research Future Fund.

A scheme encouraging dentists to work in regional and remote communities will continue as workforce planning projections indicate continued poor distribution to non-metropolitan areas.

But two graduate programs will be scrapped at the end of this year after less than 5% of placements occurred in remote and very remote regions where it was intended.

Royal commissions

The royal commission into institutional child sexual abuse has been allocated another $167,643 over the next three years.

The money is expected to help with hearings and allow commissioners to report findings and make recommendations before winding up in 2017-18.

Financial assistance toward legal costs and witness expenses has been budgeted at $13,200 while the budget for community legal services supporting the commission is $15,000.

The royal commission into trade union governance and corruption also has another $17,813 in the next financial year but no further budget allocations after that.

The government will provide $30 million to refurbish court buildings including improvements to holdings cells consistent with recommendations from the royal commission into aboriginal deaths in custody.

This cost to cover that measure - and $22.5 million over four years to make the family, federal and federal circuit courts more efficient - will come from changes to fee structures for the courts expected to net $87.4 million over four years.

VETERANS

VETERANS' Affairs coffers will be $310 million lighter next year, as the country's ranks of returned servicemen thin-out.

The portfolio will still receive $12 billion, including $6.5 billion for pensions and $5.5 billion for health care.

But older veteran disability pensioners are dying off and being replaced by in lesser numbers by new disabled veterans - with 4000 less expected to still be alive this financial year compared to the last.

VISAS

RESETTLING asylum seekers from offshore detention centres to other nations will cost some $400 million, while an extra $74 million expand "on-water" operations, turning back boats north of Australia.

Immigration will spend the $400 million to resettle asylum seekers deemed genuine refugees to Nauru, Papua New Guinea and Cambodia.

The number of days MV Ocean Shield can patrol for asylum seeker boats in the Indian Ocean will also double, from 180 days a year to 300 days, while combining the Immigration Department with Customs and Border Security will net a $270 million saving.

SCIENCE

EDUCATION Minister Christopher Pyne has neglected to fund a crucial national scientific research program for more than one year in the federal budget.

Mr Pyne used the National Collaborative Research Infrastructure Strategy as a pawn in failed higher education reform talks.

While he returned $150 million to its coffers for 2016-17, no further funds were allocated in Tuesday's budget, putting its long-term future in doubt.

WEBSITES

THE Abbott Government's websites would finally become useable if every Australian - working age or not - threw in about $10 over the next four years.

No new money has been assigned to fix mobile phone blackspots in rural areas, but $254.7 million will be spent on the government's Digital Transformation Agenda.

It aims to simplify the labyrinthine method of doing business with the government online into a more streamlined, functional process.